There are second acts, but …

By Emanuel Derman

June 30, 2011

… not all of them are totally convincing.

I am perpetually amazed at the way people can/are allowed to reinvent themselves. When I was growing up you thought you had to figure out at age 16 what you were going to do for the rest of your life. When you went to college you had to decide between medicine, arts, science, engineering, etc: either/or. The nice thing about America, and the rest of the world is slowly copying it, is that you don’t have to stick with something you started out on. There’s no “you can’t get there from here.” There are second and even third acts.

Still, some second acts are harder to understand when they seem in conflict with the first.

I understand that Mikhail Khodorkovsky is unjustly imprisoned, and I despise totalitarian arbitrary corrupt governments, and I hope they let him go, but I don’t think he got where he was at before they took it away from him by his good deeds, so I don’t want to regard him as a fount of wisdom. I’m sorry for him, but sometimes I feel that if you live by the sword etc.

Rationally or not, I sometimes feel the same about Soros. If tennis were markets, Ilie Nastase would be writing op-eds about the sad state of American sportsmanship. I know St. Augustine turned himself around, but to me he’s the exception that proves the rule.

John McEnroe, au contraire, is someone who successfully changed his image — I find I can forget or at least ignore his bratty behavior in his prime because he has a sense of humor and hasn’t turned 180 degrees. Connors, maybe, too. A sense of humor and self-deprecation can diminish many sins.

“A foolish consistency is the hobgoblin of little minds” is a saying I heard soon after I came to New York, and I liked it immediately, knowing I was going to be guilty of it.

Most people want consistency in others while exercising spontaneity in their own lives. They declare other people’s misbehavior, seen from the outside, as being wilfulness, while in their own case they understand their misbehavior, experienced from the inside, as having an explanation they can understand. Spinoza,who thought about this stuff, wrote that Will and Understanding are one and the same, by which I believe he means that they are simply the inside and the outside of the same thing.

Author Profile

Emanuel Derman is Head of Risk at Prisma Capital Partners and a professor at Columbia University, where he directs their program in financial engineering. He is the author of My Life As A Quant, one of Business Week's top ten books of the year, in which he introduced the quant world to a wide audience. His latest book, due in October from Free Press, is Models.Behaving.Badly: Why Confusing Illusion with Reality Can Lead to Disasters,On Wall Street and in Life.